Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 29) Regulations 2004
- Act Code: SFA2001-S363-2004
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 25 June 2004
- Legislation status: Current version as at 27 March 2026 (per the provided extract)
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory focus: Exemption from market conduct provisions for “stabilising action” in relation to specified notes
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 29) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain market conduct restrictions under the Securities and Futures Act (the “SFA”) for stabilising activities carried out in connection with a particular issuance of debt securities.
In plain language, the Regulations recognise that, in some capital markets transactions, market makers or underwriters may take limited steps to support or “stabilise” the trading price of newly issued notes during the initial post-issuance period. Such activity can reduce volatility and facilitate orderly trading. However, stabilising conduct can also resemble prohibited dealing or market manipulation if not carefully bounded. The Regulations therefore carve out a lawful pathway for stabilising action, but only for a specific set of notes, a specific stabiliser, and a specific time window.
Importantly, this is not a general authorisation for any stabilisation in any notes. It is an exemption tied to a defined instrument: 5-year fixed rate senior notes due July 2009 issued by LG TeleCom, Ltd., up to a stated principal amount, and stabilising action undertaken by Credit Suisse First Boston (Europe) Limited (or its related corporations). The exemption is also limited to a 30-day period from the date of issue.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the formal citation and states that the Regulations come into operation on 25 June 2004. For practitioners, this matters because exemptions from statutory prohibitions must be in force at the time the relevant conduct occurs. The commencement date aligns with the issuance timeline referenced in the Regulations’ operative provisions (notably the 30-day period from the date of issue).
2. Definitions (Regulation 2)
Regulation 2 defines two critical terms that determine the scope of the exemption:
- “Notes” are defined narrowly as the 5-year fixed rate senior notes due July 2009 issued by LG TeleCom, Ltd. for a principal amount of up to US$300 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Limited (or any of its related corporations) to buy, or to offer or agree to buy any of the Notes in order to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
These definitions are the gateway to the exemption. If the instrument is not the specified LG TeleCom notes, or if the stabilising actor is not the specified entity (or its related corporations), the exemption will not apply. Likewise, if the conduct does not fall within buying (or offering/agreeing to buy) for the purpose of stabilisation, the exemption may be unavailable.
3. The exemption from SFA sections 197 and 198 (Regulation 3)
Regulation 3 is the operative provision. It states that Sections 197 and 198 of the Act shall not apply to any stabilising action taken in respect of any of the Notes within 30 days from the date of issue, provided the stabilising action is taken with respect to either:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
From a practitioner’s perspective, the exemption is therefore conditional on both time and counterparty category. The Regulations do not merely permit stabilising action generally; they permit it only when the stabilising transactions are undertaken with the relevant categories of persons under the SFA framework.
Practical reading of the conditions
Although the extract does not reproduce the text of sections 197, 198, 274, and 275(2), the structure indicates that sections 197 and 198 are the market conduct provisions that would otherwise restrict or prohibit certain dealing practices. Sections 274 and 275(2) likely define categories of investors or counterparties that are treated differently under the SFA (for example, persons with particular sophistication or eligibility). The Regulations effectively say: stabilising action is exempt from the relevant prohibitions when conducted within the permitted period and in dealings involving eligible persons.
For compliance, this means counsel should confirm:
- the exact date of issue of the LG TeleCom notes (to calculate the 30-day window);
- the identity of the stabilising entity (Credit Suisse First Boston (Europe) Limited or its related corporations);
- the nature of the transactions (buying, or offering/agreeing to buy, for stabilisation); and
- the status of counterparties (falling within section 274 or being sophisticated investors under section 275(2)).
How Is This Legislation Structured?
The Regulations are short and structured around a conventional subsidiary legislation format:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions for “Notes” and “stabilising action”. These definitions are essential because they delimit the exemption’s scope.
- Regulation 3 contains the exemption from specified SFA provisions, including the 30-day time limit and the counterparty eligibility conditions.
There are no additional parts or schedules in the extract, reflecting the Regulations’ purpose as a targeted, transaction-specific exemption rather than a comprehensive market conduct regime.
Who Does This Legislation Apply To?
The Regulations apply to persons who take “stabilising action” as defined—namely Credit Suisse First Boston (Europe) Limited or any of its related corporations—in relation to the specified LG TeleCom, Ltd. 5-year fixed rate senior notes due July 2009 (up to US$300 million). The exemption is therefore not directed at the issuer or at all market participants; it is directed at the stabilising actor and the dealings it undertakes.
Additionally, the exemption is conditional on the stabilising action being taken within 30 days from the date of issue and in dealings with either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). Accordingly, even where the stabiliser and the notes match, the exemption may not cover stabilising transactions with counterparties outside those categories.
Why Is This Legislation Important?
This Regulations is significant because it demonstrates how Singapore’s market conduct framework balances two competing regulatory objectives: (1) preventing market manipulation and improper dealing, and (2) allowing legitimate market support mechanisms during the early trading period of new issues.
From a legal and compliance standpoint, the exemption provides certainty for stabilisation activities that might otherwise trigger prohibitions under the SFA. Without such an exemption, stabilising purchases or related offers to buy could be argued to fall within the scope of market conduct restrictions. By carving out a specific exemption, the Regulations reduce ambiguity and help market participants structure stabilisation programmes in a way that is consistent with Singapore law.
For practitioners advising on documentation, transaction execution, and regulatory risk, the key value lies in the precision of the exemption. The Regulations are narrow: they specify the notes, the stabiliser, the permitted conduct (buying/offer/agree to buy), the geographic scope (“in Singapore or elsewhere”), and the temporal scope (30 days). They also impose an additional eligibility filter based on the counterparty categories in the SFA. This means that compliance work should focus on evidencing that each element is satisfied—particularly the counterparty status and the timing of the stabilising activity.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Timeline (legislation timeline reference as provided in the metadata)
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 29) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.